Transaction Arbiter for Real-Time Merchant Bidding
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Solution Overview
Problem
Existing price comparison systems fail to provide real-time, dynamic pricing options, leading to suboptimal prices for consumers as they lack active cross-bidding between merchants.
Innovation Solution
A transaction arbiter system that facilitates active bidding between merchants, allowing them to define merchant functions and compete within a merchant function database to optimize competition and present the best possible bid to consumers.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If a static merchant price database is used for price comparison, then the system is simple to operate, but the pricing information becomes outdated and fails to reflect real-time market conditions
Solution Approach 1:
The patent transforms the static merchant price database into a dynamic system where prices are continuously updated through automated bidding processes. Merchants can adjust their prices in real-time based on competitor pricing, and the system facilitates ongoing negotiations without requiring manual intervention, thus maintaining reliability while managing complexity through automation.
Solution Approach 2:
The system enables merchants to automatically adjust their own pricing based on market conditions and competitor actions. The automated bidding mechanism allows merchants to compete for customers autonomously, with the system facilitating the bidding process without requiring constant human oversight, thereby maintaining accurate pricing information while keeping the system manageable.
2Productivity
If real-time dynamic bidding between merchants is implemented, then optimal pricing is achieved, but the system complexity increases significantly
Solution Approach 1:
The patent introduces an automated bidding system as an intermediary that mediates between merchants and customers. This intermediary handles the complex real-time negotiations and price adjustments automatically, allowing merchants to achieve optimal pricing through structured bidding processes without directly managing the complexity of real-time interactions themselves.
Solution Approach 2:
The system manages complexity by changing key parameters of the bidding process, such as setting minimum price thresholds, maximum discount limits, and time constraints for bids. These parameter changes structure the dynamic bidding process, enabling productivity gains through automated optimization while keeping the system manageable through predefined constraints.
3Adaptability or versatility
If merchants have the ability to update pricing information dynamically, then market responsiveness improves, but the risk of pricing errors and system instability increases
Solution Approach 1:
The patent implements feedback mechanisms where the automated bidding system continuously monitors market conditions, competitor pricing, and bid outcomes. This feedback loop allows merchants to update pricing dynamically in response to market changes while the system validates and regulates these updates to prevent errors and maintain stability, thus achieving adaptability without sacrificing reliability.
4Loss of time
If automated bidding processes are implemented, then real-time price competition is achieved, but the computational resources and processing time requirements increase
Solution Approach 1:
The patent employs periodic bidding cycles where price updates and negotiations occur at structured intervals rather than continuously. This periodic action allows the system to achieve real-time pricing optimization while reducing computational resource consumption by processing bids in manageable cycles, balancing speed with energy efficiency.
Data Source
AI summary
A system and method for real-time price arbitration over a cellular network are provided. A customer device sends a bid initiation data set, including product or service parameters and geographic constraints (e.g., zip code, GPS coordinates, proximity radius)—to a remote host computer. The host executes stored merchant functions, each defining a base price, maximum discount threshold, and undercut percentage, to compute a respective bid result. The lowest resulting bid is selected as the final arbitrated price and returned to the customer device over the same cellular link. A non-transitory computer-readable medium storing program instructions to perform these steps is also disclosed.